Walmart to repurchase $15 billion in shares
FAYETTEVILLE, Ark.— Wal-Mart Stores Inc. WMT +0.93% said at its shareholder meeting Friday that it plans to repurchase $15 billion in shares, as the retailer's rapid global growth propels it toward a half-trillion dollars in annual revenue.
"I just love saying half a trillion," finance chief Charles Holley told a stadium full of investors and employees, noting that Wal-Mart in 2012 reported $466 billion in revenue and opened 642 new stores around the world.
The retailer's annual pep rally was hosted this year by actor Hugh Jackman, right, who welcomed Tom Cruise on stage Friday. Meanwhile, there were protests outside Wal-Mart's headquarters this week.R
The new share-buyback program replaces an earlier $15 billion plan begun in 2011 that had used all but $712 million of its authorization. The timeline of the new buyback program wasn't immediately clear.
Wal-Mart, which operates more than 10,800 stores in 27 countries, struck an optimistic tone during a weeklong series of events, despite a 1.4% drop in same-store U.S. sales for the first quarter and declining store traffic in some markets, notably Mexico.
The company's annual pep rally and celebration, hosted this year by actor Hugh Jackman and featuring performances from John Legend and other musicians, comes as the retailer faces a litany of controversies, including bribery allegations, its treatment of workers and its safeguards to ensure the products it sells are made in humane conditions. Those issues, along with its continuing battles with organized labor, prompted a series of protests and picket lines outside its corporate headquarters this week.
Shareholder proposals emphasized Wal-Mart's refusal to sign on to a legally binding pact meant to prevent disasters such as two recent ones in Bangladesh: a building collapse that killed more than 1,100 garment workers in April, and a fire last November that killed more than 110 people in a factory where clothes bound for Walmart stores were found.
Wal-Mart, which has relationships with more than 250 Bangladesh factories and is one of the country's largest buyers, instead revealed its own plan for improving factory safety there.
It has hired an outside auditor and is requiring factory owners where problems have been found to renovate within 30 days of the audits or risk being removed from its list of authorized factories. The retailer said it is also engaged in talks with a group of U.S. retailers to form a separate agreement, but it declined to comment on further Bangladesh actions during this week's meeting.
"We have a supply chain that is out of control and a failed safety-inspection system," said Kalpona Akter, a former garment worker who is now an activist with the group Bangladesh Center for Worker Solidarity. At Friday's meeting, she presented a shareholder proposal to empower the board to call for a special shareowner meeting to vote on important matters.
"In a country where apparel workers are dying by the hundreds, could there be any more pressing case for a special meeting of shareholders?" she said.
The sourcing controversy followed on an already tumultuous year for the retail giant. Wal-Mart had to overhaul its global compliance program and conduct a large-scale investigation into its Mexican operations after possible violations of the U.S. law that prohibits bribery in foreign countries triggered investigations by the Securities and Exchange Commission and U.S. Department of Justice.
The company has so far spent $230 million on costs related to the investigation and organizational changes.
A number of proxy advisory firms and large shareholders said they would vote against several of the board members up for re-election to protest what they call poor governance and the lack of independent directors.
The resignation of three directors—Accel Partners' Jim Breyer, Marriott International Inc. MAR +1.58% CEO Arne Sorenson, and Marsh & McLennan Co. MMC +1.23% executive M. Michele Burns—with no current plans to replace them leaves nine independent directors on a 14-member board, seven of whom have outside financial ties to the company.
"Wal-Mart has continually rejected stronger, more independent oversight—from its boardroom all the way down to its supply chain—to the detriment of shareowners," New York City Comptroller John Liu said in a regulatory filing.
"Concerns over Wal-Mart's global compliance practices are rising, but the board today is even less independent than it was a year ago, when shareowners called for reform."All 14 remaining directors were re-elected by a majority. The tally will be released Monday. Nonetheless,Last year more than 13% of voting shares went against director and former CEO H. Lee Scott, CEO Mike Duke, Chairman Robson Walton, son of founder Sam Walton, and Christopher Williams, an investment banker and chairman of the board's audit committee. But the votes have little practical effect as the Walton family controls more than half the stock.
Write to Shelly Banjo at shelly.banjo@wsj.com
